## Facts

- Amanda Acquisition Corp., backed by High Voltage Engineering Corp., launched a hostile tender offer to acquire all shares of Universal Foods Corp., a Wisconsin corporation.
- The tender offer’s economic plan depended on a prompt post-acquisition merger to obtain control and integrate operations.
- Wisconsin’s Business Combination Act restricted certain “business combinations” between a Wisconsin corporation and an “interested shareholder” for three years after the shareholder became “interested,” unless the board approved the transaction in advance or statutory conditions were satisfied.
- Amanda contended the statute deterred hostile takeovers by delaying or preventing the follow-on merger needed to make the tender offer viable.
- Amanda sued seeking, among other relief, declaratory and injunctive relief against enforcement of the statute and other takeover defenses.
- The district court denied preliminary injunctive relief against the statute and upheld it against federal preemption and Commerce Clause challenges.
- Amanda appealed the statute-related rulings to the Seventh Circuit; Universal Foods cross-appealed on other matters.

## Issues

1. Whether Wisconsin’s Business Combination Act is preempted by the Williams Act, either because federal law occupies the field of tender-offer regulation or because the state statute conflicts with the Williams Act’s objectives.
2. Whether the statute violates the dormant Commerce Clause by discriminating against interstate commerce or imposing an undue burden on interstate tender offers for Wisconsin corporations.

## Decision

- The Seventh Circuit affirmed the district court’s refusal to invalidate Wisconsin’s Business Combination Act.
- The court held the statute was not preempted by the Williams Act because it regulates post-acquisition corporate combinations and shareholder rights rather than the federal tender-offer process.
- The court held the statute did not violate the dormant Commerce Clause because it applies evenhandedly and concerns the internal affairs of corporations chartered by the state.

## Legal Principles

- The Williams Act primarily regulates the mechanics of tender offers (disclosure, timing, and related procedures) and does not generally displace state corporate law governing post-acquisition rights and internal governance.
- State laws affecting the consequences of acquiring shares—such as limits on mergers or other combinations with an interested shareholder—are not preempted absent a direct conflict with federal tender-offer requirements.
- For dormant Commerce Clause purposes, a statute that applies uniformly to all bidders and is limited to corporations incorporated in the enacting state is typically treated as internal-affairs regulation rather than protectionist discrimination.
- Incidental burdens on interstate transactions do not invalidate an internal-affairs corporate statute where the law serves legitimate state interests and does not target out-of-state actors.

## Conclusion

The Seventh Circuit upheld Wisconsin’s three-year business-combination waiting-period regime as a permissible exercise of state authority over the internal affairs of Wisconsin corporations, rejecting claims that it was preempted by the Williams Act or unconstitutional under the dormant Commerce Clause.


Amanda Acquisition Corp. v. Universal Foods Corp., 877 F.2d 496 (7th Cir. 1989)